Equus Announces Third Quarter Net Asset Value
November 14 2012 - 9:41PM
Marketwired
Equus Total Return, Inc. (NYSE: EQS) (the
"Fund" or "Equus") reports net assets as of September 30, 2012, of
$31.7 million, a decrease of approximately $1.7 million since June
30, 2012. Net assets per share decreased to $3.00 as of September
30, 2012 from $3.16 as of June 30, 2012. Cash and cash equivalents
totaled $26.2 million as of September 30, 2012, a decrease of $0.8
million since June 30, 2012. Comparative data is summarized below
(in thousands, except per share amounts):
As of the Quarter Ended 9/30/2012 6/30/2012 3/31/2012 12/31/2011 9/30/2011
--------- --------- --------- ---------- ---------
Net assets $31,664 $33,418 $37,651 $38,148 $38,970
Shares outstanding 10,562 10,562 10,562 10,562 10,562
Net assets per share $3.00 $3.16 $3.56 $3.61 $3.69
Cash and cash equivalents $26,246 $27,039 $16,296 $16,813 $16,648
Cash per share $2.48 $2.56 $1.54 $1.59 $1.58
Equus also reported a decrease in total Fund expenses of
approximately $0.1 million for the third quarter of 2012 as
compared to the third quarter of 2011, and a decrease of
approximately $1.1 million for the first nine months of 2012 as
compared to the first nine months of 2011.
During the quarter, there was a decline in the fair value of
Spectrum Management Group, LLC ("Spectrum"). The Fund made its
initial investment in Spectrum in 1999. Spectrum uses proprietary
electronic tracking equipment and software, and a full suite of
custom services to help client organizations, mainly financial
institutions, protect or recover high-value merchandise and cash.
Spectrum markets its services under the brand name Electronic
Tracking Systems or ETS. The company specializes in assisting
communities and law enforcement in recovery of stolen property.
In recent years, Spectrum has lost key customer accounts and has
had declining EBITDA, which decline has continued into 2012. As a
result of these and other negative factors, the Fund applied a
liquidation approach for valuation purposes. Continued
deterioration of the business has resulted in a decrease in the
fair value of this investment from $0.3 million as of June 30, 2012
to $0.1 million as of September 30, 2012.
Subsequent to the end of the quarter, on October 15, 2012, the
Fund announced that it had sold 1,500,000 of its 1,573,666 shares
of Orco Property Group S.A. ("OPG") and received net cash proceeds
of EUR 3.8 million, or $4.9 million, based on the settlement date's
EUR-USD intra-day exchange rate of 1.293. The OPG shares had been
received by the Fund in two tranches as a result of the conversion
of the Fund's holding of 8,890 4% bonds of Orco Germany S.A., a
controlled subsidiary of OPG. The first tranche, consisting of
1,102,455 shares of OPG, was received on May 9, 2012 and a second
tranche of 471,211 OPG shares was received on October 8, 2012. In
addition to the OPG shares, the Fund also received 6-year OPG notes
in the principal amount of EUR 1.2 million. The OPG notes, due
February 2018, bear interest of 5% cash and 5% PIK per annum, which
interest percentages may be reduced over time upon timely
repayments of principal tranches during a four-year period
commencing in 2015.
The net cash received from the sale of the OPG shares, exceeds
the $2.7 million cost of investment of those shares (as disclosed
in the Fund's most recent report on Form 10-Q for the quarter ended
September 30, 2012), resulting in a realized gain of $2.2 million.
Following the OPG share sale, the Fund still holds 73,666 OPG
shares and the OPG notes.
Based on cash and cash equivalents of $26.2 million held by
Equus at September 30, 2012, combined with the proceeds from the
sale of the OPG shares, the Fund's cash increases to $31.1 million
or $2.95 of cash per share. The sale would have increased the Net
Assets per share of $3.00 (as of September 30, 2012) by $0.15.
About Equus The Fund is a business
development company that trades as a closed-end fund on the New
York Stock Exchange, under the symbol "EQS". Additional information
on the Fund may be obtained from the Fund's website at
www.equuscap.com.
This press release may contain certain forward-looking
statements regarding future circumstances. These forward-looking
statements are based upon the Fund's current expectations and
assumptions and are subject to various risks and uncertainties that
could cause actual results to differ materially from those
contemplated in such forward-looking statements including, in
particular, the risks and uncertainties described in the Fund's
filings with the SEC. Actual results, events, and performance may
differ. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as to the date hereof.
Except as required by law, the Fund undertakes no obligation to
release publicly any revisions to these forward-looking statements
that may be made to reflect events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events. The
inclusion of any statement in this release does not constitute an
admission by the Fund or any other person that the events or
circumstances described in such statements are material.
Contact: Patricia Baronowski Pristine Advisers, LLC (631)
756-2486
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